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Discussion Starter · #1 ·
Scenario.

Bossman offers a cash incentive for hitting the monthly sales target.
3 sales teams working together to hit the number. At T-4 days the sales teams have less than 20% of the target booked. With 3 days left in the month they pull out all the stops and work their butts off to hit the number.

Final sales come in at $200 under the target.


Do you excuse the $200 shortfall and pay up full incentive?
Do you reduce the incentive payout by some % because of the shortfall? (this was not originally mentioned as a consideration)
So you not pay because the target was not achieved?

by the way, no outcome affects me personally so please speak your mind.
 

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This is kind of a tough call, I think. On the one hand, if the bossman provides a reward in spite of the fact that the goal is not reached, ya don't learn nuthin. Basically, an incentive is received regardless of whether the goal is reached.

On the other hand, $200 is really a piddly amount of money in the scheme of things. To deny an incentive based on such a small amount would sure make the bossman seem like a harda$$.

I say reduce the incentive by a percentage based on the shortfall.
 

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Power 2 the pedal
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Wouldn't that be rewarding procrastination? They piddled until they realized they weren't reaching the goal, then decided to put in the effort. In their minds, they worked their asses off, (even if it wasn't until the last minute). Giving them the bonus minus a percentage would send the wrong message I think. But then, I am a hardass when it comes to employees. If I set a goal, don't piddle until the last minute, that is how mistakes are made. Get the task/job done, and move on to the next goal. Rewards are for those that perform to meet or exceed their goals, not come close.
 

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That's nacho cheese!
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I have to go watch Michael Keaton in "GUNG HO" before I render my decision.
 

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That's nacho cheese!
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Yes, DANKE! They will never see that one coming.:euro: Everyone loves ice cream!
 

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You cave in once... you'll be caving in in the future

Depending on what the Cash incentive was, I would consider taking $400.00 off of that. If they work on comission (I should know, I used to work at 100% comission), they will bust their ass to get to the goal and/or surpass it because 1) they don't want to loose that cash incentive and 2) they don't want to loose $400.00 off of it :D

I have been there and even though, it angry me to no end that our boss didn't give us the incentive after getting so close to it, it made me work even harder to be able to get it next time. There's always a slacker in the group and the others will bust his back to get up to speed or they will make his life miserable until he quits and the team can get someone up to their level.

Wow... Flashbacks coming back again :D
 

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Heavy Metal
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Failure Is Not An Option...

don't make the # => u don't make the $, period.
 

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Targets are targets. I personally do not reward for missing objectives. But, I do increase the reward when the original target or objective is exceeded.

Ex: The annual cash bonus (short-term) is based on achieving 100% of the obejctive, with a payout of 30% base salary. The sweetener is, I double the payout if 115% objectives are achieved. There is a straight-line for anything in between.
 

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ratdog said:
Failure Is Not An Option...

don't make the # => u don't make the $, period.
If you were a manager, you'd be loved.

Depending on the size of the margins they were working with, I'd make a deal for something lesser.

Or pool together $200 with the other guys on the sales team and then you made your goal.
 

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I need more info to render my decision. Are we talking a total sales goal of $200k and they fell $200 short? What was the actual goal and what was the actual number hit?

If it is purely cut and dry as you described it... they get nothing!

They dont hit the goal, you get nothing... wasnt that the plan?


On the same note, who writes an incentive plan like that? There should be a minimum which needs to be reach and from there on up is where incentives kick in with a sliding scale. Also, NEVER cap an incentive. I tought my last employer the hard lesson about that a few years ago. They set profit $ goals for us... capped at a $ figure. Well, above that, what incentive do I have to make any more cash? NONE! SO what do I do... start paying off long term rentals, buying PC's, etc... so that next year, I was already ahead of the game. Even worse, this is what really pissed them off, I did some 'side work' and helped another manager out with some costs on a job. On an internal job, I took a big loss. Helped him out tremendously, and helped him hit his numbers, but just brought me back to where they capped me. Man were they PISSED when they figured that one out. I just shrugged and said... 'The job didnt go that well.. lost some money on it... what can you do?! Where's those bonus'?' The next year they didnt fix the cap scenario... they just skyrocketed my goal... pricks!
 

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Discussion Starter · #14 ·
Not really referring to the salaried reps with an established commission structure. the gm threw a bone to the SM's by saying if they hit $32k he'd give them a $250 bonus. They missed by a couple hundred.

One SM says she should absolutely get the cash.
One SM says something would be nice but it is what it is.

I say no. You missed the target and didn't achieve the goal. Congratulations on getting close, next month let's dive into the first 2 weeks of the month with the same vigor as you had in the last 2 days of the month and blow out the number.

You know why you can get a better deal on a car on the last day of the month? Because people procrastinate. Sales Reps are always pushing for quota at the last minute even though they've been selling for years, too often they just don't get it, no good funnel, no staging, everything is a panic and they always repeat the pattern. If someone can figure out how to break the monthend pattern of outside sales, put it into a real world applicable plan that actually works they'll be a billionaire.

I've been trying to break salespeople of this pattern for 6 years with practically no luck and i'm no dummy from the woods.
 

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I agree JB. But if you're talking a $250 bonus for $32 thousand in sales, I'd say theres enough profit margin built in to give them 10%, but no more. Give em gift certificates for $25 to a restaurant, and tell them, like you said, work that hard the first 2 weeks and the bonus is gravy!
 

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I'm glad you discussed the scenario, because most commission folks have to earn commission to make "salary". That is, I must make a certain amount of quotas to meet my planned average. That sucks and if someone stiffed me a bonus based on that, I'd request a change in pay plan at my next review, and if that doesn't happen, I'm considering a change of scenery.
 

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Now that you explain it.... They get NOTHING!

Next month... same thing....

Enough months go by, and they will figure it out. The rabbit always lost to the turtle? Slow and steady not fast and quick.... or something like that?!
 
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